Présentation des résultats financiers Ericsson (Q3 2010)

THIRD QUARTER REPORT October 22, 2010

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ERICSSON REPORTS THIRD QUARTER RESULTS “Group sales in the quarter increased 2% year-over-year and was almost flat sequentially, negatively affected by a strong SEK,” says Hans Vestberg, President and CEO of Ericsson (NASDAQ:ERIC). “Sales in the quarter for comparable units, adjusted for currency exchange rate effects and hedging, decreased -5% year-over-year.

Networks sales grew 6% year-over-year with a continued transition from voice to data related business. Global Services sales grew 3% year-over year and accounted for some 40% of total sales. In local currencies Professional Services sales grew 10%. Multimedia sales declined -31% year-over-year.

A key priority has been to mitigate the effects of industry-wide component shortage and supply chain bottlenecks. The situation has gradually improved during the quarter but it remains a challenge to fully meet the demand for mobile broadband. While the supply chain bottlenecks have been resolved the industry-wide component shortage remains.

Net income increased year-over-year and sequentially mainly due to improvements in operational results and Sony Ericsson earnings as well as less restructuring charges. At the same time cash flow was strong in the quarter at SEK 12.7 b.

During the quarter, mobile broadband continued to grow, especially in North America and Japan. In China demand for 2G capacity expansions returned during the quarter. India gradually improved with 2G deliveries and in the 3G vendor selection, we have maintained our market share. Western Europe is still slow although we have been awarded our first modernization contracts. In other markets, development is slow with continued cautious operator investments. Across the world, operator focus is still on reducing operating expenditure and outsourcing of operations.

We see continued growth opportunities in the market and the combined strength of our technology leadership, our scale advantage, along with global presence and skilled employees are our key assets,” concludes Hans Vestberg.

Third quarter Second quarter Nine months SEK b. 2010 2009 Change 2010 Change 2010 2009 Change

Net sales 47.5 46.4 2% 48.0 -1% 140.6 148.1 -5%Gross margin 39% 36% - 39% - 39% 36% -EBITA margin excl JVs1) 16% 14% - 14% - 14% 13% -Operating income excl JVs 6.2 5.5 14% 5.3 16% 16.1 17.1 -6%Operating margin excl JVs 13% 12% - 11% - 11% 12% -Ericsson’s share in earnings in JVs 0.0 -1.5 - -0.1 - -0.4 -5.6 -Income after financial items 6.1 4.0 52% 5.1 20% 15.2 12.2 25%Net income 3.6 0.8 360% 2.0 75% 6.9 3.4 101%EPS diluted, SEK 1.14 0.25 356% 0.58 97% 2.12 1.05 102%Adjusted operating cash flow2) 12.7 6.9 - -2.0 - 13.7 15.1 -Cash flow from operations 11.8 5.7 - -2.7 - 11.4 12.0 -Restructuring charges excl JVs 0.9 2.7 - 2.0 - 5.1 7.0 -

All numbers, excl. EPS, Net income and Cash flow from operations, excl. restructuring charges. 1) EBITA – Earnings before interest, tax, amortizations and write-downs of acquired intangibles. 2) Cash flow from operations excl. restructuring cash outlays that have been provided for. Cash outlays in the third quarter

2010 were SEK 0.9 (1.2) b.

FINANCIAL HIGHLIGHTS Income statement and cash flow Sales in the quarter were up 2% year-over-year and down -1% sequentially. Sales for comparable units, adjusted for currency exchange rate effects and hedging, declined -5% year-over-year. The year-over-year net impact of currency exchange rate effects and hedging was slightly negative.

In the second quarter sales were negatively impacted by SEK 3-4 b. by industry-wide component shortages and supply chain bottlenecks. The situation has gradually improved but it remains a challenge to fully meet the demand for mobile broadband. While we have delivered the back-log from previous quarter, we estimate that we had a negative effect on sales also in this quarter of SEK 2-3 b. from component shortage.

Modernization projects, where the installed 2G/3G base is modernized using multi standard radio access technology, often on a turn-key basis, have started. This had a minor impact on sales and margins in the quarter, but will impact gradually more in 2011. 3G rollouts in India have not had any impact on sales or margins in the quarter and will start to impact from next quarter.

Ericsson Third Quarter Report 2010 2

Gross margin, excluding restructuring, increased year-over-year to 39% (36%) and was flat sequentially. The year-over-year improvement is an effect of a business mix with a higher proportion network upgrades and expansions as well as positive effects of cost reduction activities.

The cost reduction activities have reduced operating expenses as planned. However, integration of the acquired CDMA and GSM businesses, higher investments in certain R&D areas and growing number of 4G/LTE trials, have resulted in an increase in operating expenses to SEK 13.0 (11.6) b., excluding restructuring charges. The sequential reduction in operating expenses of SEK 0.9 b. follows normal seasonality.

Other operating income and expenses were SEK 0.6 (0.2) b. in the quarter.

Operating income, excluding joint ventures and restructuring charges, amounted to SEK 6.2 (5.5) b. Operating margin increased to 13% (12%) year-over-year and improved sequentially from 11%. The year-over-year improvement follows the positive development in gross margin and the sequential improvement follows the seasonally low operating expenses and higher other operating income.

SALES BY QUARTER 2009 AND 2010 (SEK B)

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Q1 Q2 Q3 Q4 Q1 Q2 Q3

2009 2010

Ericsson’s share in earnings of joint ventures, before tax, amounted to SEK 0.0 (-1.5) b. excluding restructuring charges, compared to SEK -0.1 b. in the second quarter. Sony Ericsson improved results year-over-year significantly due to efficiency programs and a new slimmer product portfolio and was stable sequentially. ST-Ericsson’s loss was slightly reduced year-over-year and was unchanged sequentially. Restructuring charges in joint ventures were SEK -0.1 b. in the quarter.

Financial net was SEK -0.1 (0.0) b. and unchanged sequentially.

Net income amounted to SEK 3.6 (0.8) b. and earnings per share were SEK 1.14 (0.25) in the quarter. The improvements, both year-over-year and sequentially, are mainly a result of improved operational results and JV earnings as well as less restructuring charges.

Adjusted operational cash flow was SEK 12.7 (6.9) b. in the quarter, up sequentially from SEK -2.0 b. Cash flow from operations amounted to SEK 11.8 (5.7) b. mainly due to improved results and collections.


Balance sheet and other performance indicators

SEK b. Dec 31

2009Mar 31

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June 30

2010Sep 30

2010

Net cash 36.1 38.5 25.8 35.7 Interest-bearing liabilities and post-employment benefits 40.7 39.3 41.8 40.4 Trade receivables 66.4 62.7 69.4 57.8 Days sales outstanding 106 117 133 109 Inventory 22.7 24.1 29.4 30.3 Of which regional inventory 12.9 14.0 18.3 19.1 Inventory days 68 75 81 82 Payable days 57 59 61 62 Customer financing, net 2.3 2.9 3.1 3.5 Return on capital employed 4% 5% 6% 8% Equity ratio 52% 53% 51% 52%

Trade receivables decreased sequentially by SEK 11.6 b. to SEK 57.8 (69.4) b. positively impacted by improved collections and the strong SEK. Days sales outstanding (DSO) improved from 133 to 109 days.

Inventory increased slightly sequentially by SEK 0.9 b. to SEK 30.3 (29.4) b. impacted by seasonal build up and larger than normal inventories following supply chain bottlenecks. However, this was partly offset by a strong SEK. Inventory turnover days increased from 81 to 82 days.

Goodwill decreased to SEK 26.3 (30.0) b. due to a strong SEK.

Cash, cash equivalents and short-term investments amounted to SEK 76.2 (67.6) b. The net cash position increased sequentially by SEK 9.9 b. to SEK 35.7 (25.8) b., mainly due to positive cash flow from operations.

During the quarter, approximately SEK 1.7 b. of provisions were utilized, of which SEK 0.9 b. related to restructuring. Additions of SEK 0.8 b. were made, of which SEK 0.4 b. related to restructuring. Reversals of SEK 0.4 b. were made of which SEK 0.2 b. related to restructuring. The lower amount of additions is mainly due to business mix. Provisions will fluctuate over time depending on business mix, market mix as well as technology shifts.

Restructuring cost excluding joint ventures In the quarter, restructuring charges amounted to SEK 0.9 b. In the fourth quarter 2010, restructuring charges of approximately SEK 1.5 b. is estimated. These cost reductions primarily relate to continuous efficiency activities in service delivery and development, transformation in managed services contracts and product rationalization.

The cost reduction program, initiated in first quarter 2009, was completed by the second quarter 2010. At the end of the quarter, cash outlays of SEK 3.8 b. remain to be made. Cash outlays in the third quarter were SEK 0.9 (1.2) b.

Cost and capital efficiency remain high on the company agenda.

2010 2010 2010 2009

Restructuring charges, SEK b. Q3 Q2 Q1Full year

Cost of sales -0.4 -1.0 -0.8 -4.2 Research and development expenses -0.5 -0.6 -0.3 -6.1 Selling and administrative expenses 0.0 -0.4 -1.1 -1.0 Total -0.9 -2.0 -2.2 -11.3

SEGMENT RESULTS

Third quarter Second quarter Nine months SEK b. 2010 2009 Change 2010 Change 2010 2009 Change

Networks sales 26.1 24.5 6% 25.5 2% 76.3 82.1 -7%EBITA margin1) 21% 16% - 17% - 18% 15% -Operating margin 17% 14% - 13% - 14% 13% -Global Services sales 19.1 18.6 3% 20.1 -5% 57.3 56.1 2% Of which Professional Services 13.7 12.8 7% 14.8 -7% 41.8 39.7 5% Of which Managed Services 5.2 3.6 46% 5.6 -7% 15.8 12.3 28% Of which Network Rollout 5.3 5.8 -8% 5.2 2% 15.4 16.4 -6%EBITA margin1) 12% 11% - 12% - 12% 13% - Of which Professional Services 16% 17% - 15% - 16% 18% -Operating margin 11% 9% - 12% - 11% 12% - Of which Professional Services 16% 15% - 15% - 15% 17% -Multimedia sales 2.3 3.4 -31% 2.4 -4% 7.0 9.9 -29%EBITA margin1) 0% 15% - -5% - -3% 13% -Operating margin -8% 11% - -13% - -11% 7% -Total sales 47.5 46.4 2% 48.0 -1% 140.6 148.1 -5%

All numbers exclude restructuring charges. 1) EBITA – Earnings before interest, tax, amortizations and write-downs of acquired intangibles.

Networks Networks’ sales in the quarter increased by 6% year-over-year, positively impacted by the acquired Nortel businesses. Sequentially sales increased 2%. Mobile broadband sales, including radio, backhaul and packet core, increased in the quarter, especially driven by markets such as the US and Japan. Voice related sales remained slow. As explained in the section Financial highlights sales have continued to be impacted by the industry-wide component shortage.

SEGMENT SALES BY QUARTER, 2009 AND 2010 (SEK B)

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2009 2010MultimediaGlobal ServicesNetworks

EBITA margin in the quarter increased year-over-year to 21% (16%). The year-over-year improvement is an effect of a business mix with a higher proportion network upgrades and expansions and cost reduction activities. The sequential improvement is also an effect of good business mix as well as seasonally low operating expenses.

LG-Ericsson had a slow quarter due to cautious operator investments ahead of LTE.

Demand for the multi standard radio base station RBS 6000 is at a high level and production levels are ramping up. Several operators are entering the second wave of mobile broadband, moving from one-size-fits-all business models to offering differentiated quality and pricing models. This development is supported by smart pipes from Ericsson with integrated radio access and (IP based) packet core nof service.

etworks, offering network based quality

Global Services Global Services sales were up 3% year-over-year, and decreased -5% sequentially, negatively impacted by a strong SEK in the quarter. Global services sales account for some 40% of total Group sales with recurring business at a record high level.

Professional Services sales increased 7% year-over-year and 10% in local currencies. Managed Services sales in the quarter increased by 46% year-over-year. The year-over-year growth in Managed Services sales is primarily an effect of the added Sprint contract. The second half 2009 was negatively impacted by the reduced scope of a managed services contract in Italy. Network Rollout sales decreased -8% year-over-year negatively impacted by supply chain bottlenecks as well as lower proportion of turnkey projects.



The trend with good demand for services targeting the operational efficiency of operators, such as managed services, systems integration and consulting, continued in the quarter. Operators also seek new business models and show increasing interest for network sharing. Sales in the segment are positively affected by mobile broadband demand, while services related to voice continued to develop unfavorably.

EBITA margin for Global Services was slightly up at 12% (11%) year-over-year and flat sequentially. EBITA margin for Professional Services amounted to 16% (17%) in the quarter and increased slightly sequentially from 15% due to lower proportion of network rollouts.

During the quarter, 13 managed services contracts were signed of which eight were extensions or expansions of existing customer agreements. Year-to-date, 38 contracts have been signed, well above the number for full year 2009.

During the quarter, Vodafone Germany selected Ericsson as exclusive partner to manage the field services of its fixed and mobile access and transmission networks as well as fixed core network nodes. Ericsson welcomed 600 employees from Vodafone on October 1.

Ericsson provides support for networks that serve more than two billion subscribers worldwide. The total number of subscribers in networks managed by Ericsson is more than 750 million.

Multimedia Multimedia sales in the quarter showed negative growth at -31% year-over-year and -4% sequentially. Operators in regions India, Middle East and Sub-Saharan Africa have postponed investments due to delayed upgrades of charging systems and operator consolidations. Our TV solution offering continued its positive development. EBITA margin amounted to 0% (15%) as a result of the lower sales within revenue management. Margin improved sequentially from -5% mainly due to lower cost levels.

A program for return to profitability has been initiated.

Sony Ericsson Third quarter Second quarter Nine months

EUR m. 2010 2009 Change 2010 Change 2010 2009 Change

Number of units shipped (m.) 10.4 14.1 -26% 11.0 -5% 31.9 42.5 -25%Average selling price (EUR) 154 114 34% 160 -4% 150 119 26%Net sales 1,603 1,619 -1% 1,757 -9% 4,765 5,038 -5%Gross margin 30% 16% - 28% - 29% 12% -Operating margin 4% -12% - 2% - 3% -17% -Income before taxes 62 -199 - 31 - 112 -853 -Income before taxes, excl restructuring charges 66 -198 - 63 - 151 -838 -Net income 49 -164 - 12 - 82 -669 -

Sony Ericsson reported its third consecutive quarter of profit showing that the overall performance is stabilizing. Units shipped in the quarter were 10.4 million, a decrease of -26% year-over-year and a decrease of -5% sequentially. Sales in the quarter were EUR 1,603 million, a decrease of -1% year-over-year and -9% sequentially.

Income before taxes for the quarter, excluding restructuring charges, was a profit of EUR 66 (-198) million, following the positive effects of the transformation program and a slimmer product portfolio.

At the end of the quarter, Sony Ericsson had a net cash position of EUR 538 million.

Ericsson’s share in Sony Ericsson’s income before tax was SEK 0.3 (-1.0) b. in the quarter.


ST-Ericsson Third quarter Second quarter

USD m. 2010 2009 Change 2010 Change Net sales 565 728 -22% 544 4% Adjusted operating income1) -85 -77 - -118 - Operating income before taxes -129 -121 - -148 - Net income -121 -112 - -139 -

1) Operating income adjusted for amortization of acquired intangibles and restructuring charges. Net sales increased 4% sequentially. The operating loss decreased sequentially due to savings generated by restructuring and positive seasonal effects.

Inventory increased by USD 33 million, reaching USD 295 million, mainly reflecting lower demand in certain TD-SCDMA products.

Net financial position was USD 39 million, compared to USD 43 million at the end of the previous quarter. During the quarter trade receivables were sold without recourse, of which USD 179 million were outstanding at the end of the quarter, representing a sequential increase of USD 112 million. During the quarter, a short-term credit facility of USD 50 million, made available by parent companies, was utilized.

The USD 230 million restructuring plan, completed at the end of the second quarter 2010, has now given full impact. The USD 115 million restructuring plan is on track and has started to contribute savings. This plan is expected to be completed by the end of the fourth quarter 2010.

ST-Ericsson continues to be focused on achieving productivity and efficiency gains on top of and beyond the ongoing restructuring program.

ST-Ericsson is reported in US GAAP. Ericsson’s share in ST-Ericsson’s income before tax, adjusted to IFRS, was SEK -0.4 (-0.5) b. in the quarter, including restructuring charges of SEK 0.1 (0.1) b.

REGIONAL OVERVIEW Third quarter Second quarter Nine months

Sales, SEK b. 2010 2009 Change 2010 Change 2010 2009 ChangeNorth America 12.9 4.0 223% 13.1 -1% 35.4 14.5 145%Latin America 3.7 5.0 -27% 4.2 -13% 11.8 14.2 -16%Northern Europe and Central Asia 2.4 2.7 -13% 2.7 -12% 7.3 8.5 -13%Western and Central Europe 4.3 5.5 -22% 4.4 -3% 14.0 16.3 -15%Mediterranean 5.0 5.2 -3% 5.6 -11% 15.7 18.1 -13%Middle East 2.7 4.5 -40% 3.8 -28% 10.5 13.2 -21%Sub-Saharan Africa 1.8 3.2 -44% 3.0 -39% 7.2 11.5 -38%India 2.1 4.2 -49% 1.4 58% 5.8 11.8 -51%China and North East Asia 6.9 5.6 24% 4.6 51% 16.5 18.6 -11%South East Asia and Oceania 3.8 4.8 -20% 3.6 5% 11.0 15.7 -30%Other 1.9 1.8 1% 1.6 13% 5.4 5.8 -6%Total 47.5 46.4 2% 48.0 -1% 140.6 148.1 -5%

North America sales increased 223% year-over-year and declined -1% sequentially. North America had a strong quarter and excluding effects from the strong SEK sales grew also sequentially. The mobile data market continues to develop quickly with all main carriers now offering a pre-paid data service to stimulate demand further. With strong growth in data services in the US market we now see operators introducing tiered price plans based on quality and performance. In September, MetroPCS, launched 4G/LTE together with Ericsson in the Dallas market.

Latin America sales decreased -27% year-over-year and -13% sequentially. The region is characterized by major mergers between regional operators and restructuring plans to increase competitiveness. Business in the quarter included 2G and 3G network expansions as well as new managed services deals. The Chilean government launched its national mobile broadband network to cover rural areas, aiming to reach more than three million Chileans when completed.


Northern Europe and Central Asia sales decreased by -13% year-over-year and by -12% sequentially. In the Eastern part of the region there is both an ongoing 2G expansions and 3G buildouts driven by increased data traffic. In the Western part of the region network modernization is high on operators’ agendas. 4G/LTE trials are planned or ongoing across the region. There is an increasing interest for managed services across the region.

Western and Central Europe sales decreased -22% year-over-year and -3% sequentially, negatively impacted by a strong SEK. Mobile broadband usage continues to increase in the region. Following conclusions of auctions for 4G/LTE in several markets, Ericsson has been selected for a number of 4G/LTE trials now being implemented with major operators. Ericsson is also supporting operators in connection with 3G data capacity and modernization projects.

Operators’ focus on efficiency continued to drive strong interest in exploring business models such as managed operations, network sharing and network transformation leading to opportunities in both services and networks. The UK is at the forefront of network sharing and Ericsson has reached the milestone of consolidating more than 10,000 shared sites for Mobile Broadband Network Ltd (MBNL). Ericsson also extended the managed services business through extensions of existing contracts. This includes a three year extension with Netia Poland, as well as landing a five year managed field service contract for Vodafone in Germany.

Mediterranean sales decreased -3% year-over-year and -11% sequentially. Operator investments in Spain and Greece continue to be cautious due to overall economic environment and price competition among operators. In order to meet demand for mobile broadband services, operators continued to focus on network modernization also during the third quarter, and network speed is seen as a competitive advantage. Operational efficiency continues to be high on the agenda which creates good demand for managed services and consulting in networks as well as in all ICT areas. During the quarter it also became evident that operators are increasing their demand within revenue management and specifically around convergent charging, both for products and system integration.

Middle East sales decreased -40% year-over-year and -28% sequentially due to cautious operator investments in some parts of the region. Development in the region showed large variations where Gulf Countries continued to show good momentum, while most other parts of the region were slow. Services continue to be a large part of the business, representing 44% of total sales in the quarter. Managed services as well as billing and revenue management are growing in importance. Operators are starting to show interest in 4G/LTE with several trials going on throughout the region. Mobile subscriptions in the region are developing positively with net additions for both voice and broadband services.

Sub-Saharan Africa sales decreased by -44% year-over-year and -39% sequentially. The cautious operator investments continued in the quarter due to operator consolidation in the region. The demand for voice services is still the prime driver, generating a continued demand for 2G/GSM in countries such as Central African Republic, Ivory Coast, Togo and Zimbabwe. However, demand for mobile broadband is emerging throughout the region although currently at a low pace. Increased backhaul capacity should make consumer services more affordable and drive further demand. Services sales increased to more than 50% in the quarter.

India sales decreased -49% year-over-year and increased 58% sequentially. In the quarter, investments in 2G/GSM capacity and coverage picked up. Deliveries in the quarter have been under the interim security clearance process. The final government decision on this process is still pending. Main focus for operators has been on vendor selection for 3G rollouts. Deployments of 3G and trials for 4G/LTE are expected in coming quarters. In the 3G vendor selection, Ericsson has maintained its market share and during the quarter Bharti Airtel awarded the majority of their 3G circles to Ericsson.

China and North East Asia sales increased 24% year-over-year and by 51% sequentially. The year-over-year growth is mainly related to demand for mobile broadband in Japan where sales increased 63%. Sales in China declined -8% year-over-year due to tough comparison following major 3G rollouts in 2009. The sequential increase of 18% in China is primarily related to increased demand for 2G capacity expansions.

LG-Ericsson had a slow quarter due to cautious operator investments ahead of LTE.


South East Asia and Oceania sales decreased -20% year-over-year and increased 5% sequentially. The decline in sales reflects last year's one-time greenfield network rollouts in the Philippines and Vietnam. In markets with increasing usage of mobile broadband, operator demand for network equipment was good. In Vietnam operator investments are postponed due to upcoming elections. The 3G license process in Thailand is uncertain and high SIM card tax remains in Bangladesh. Services business this quarter included expansions in Bangladesh, Malaysia and Thailand. Services declined in Australia due to reduced scope in the Vodafone Hutchison managed services contract. Multimedia sales were stable year-over-year, with overall good development in multimedia brokering, IPTV in Australia as well as charging in Bangladesh.

Other includes sales of for example embedded modules, cables, power modules as well as licensing and IPR.

MARKET DEVELOPMENT Growth rates are based on Ericsson and market estimates The global mobile infrastructure market continued to decline in the first half of 2010, although at a slower pace than in 2009, measured in USD. In the second quarter, operator revenues had increased for three consecutive quarters and we believe that the fundamentals for longer-term positive development for the industry remain solid. Ericsson is well positioned to drive and benefit from this development.

Mobile broadband is being built-out across the world and WCDMA networks covers around 35% of the world’s population. Almost all of these networks have also launched HSPA. HSPA subscriptions now represent around 6% of the world’s subscriptions, up from 4% in the third quarter 2009. Wider coverage and the surge for mobile internet services will drive further uptake of HSPA.

Ericsson findings based on measurements in live networks show that global mobile data traffic more than doubled between second quarter 2009 and second quarter 2010 and mobile data traffic is forecasted to almost double annually over the coming years, primarily driven by 24/7 connectivity and usage of smartphones, tablets and laptops.

Voice traffic is still the main revenue source for operators even though data represents an increasing share as more and more consumers use data traffic generating devices. In average, mobile data revenues, including SMS, constitute for almost 30% of total service revenues, up from 26% a year ago. In average, it has reached 32% in North America, 27% in Europe and 25% in high-growth markets in Asia. In Japan, there are operators whose data revenues account for more than 50% of total revenues. In a basket of five countries, including the US, Japan, Germany, UK and Australia, mobile data revenue grew from 32% in second quarter 2009 to 36% in second quarter 2010. Tiered price plans for mobile broadband are on operators’ agendas and have been introduced this year.

Data traffic uptake in mobile and fixed networks drives need for higher capacity in areas such as backhaul, aggregation, transport, routing based on IP and Ethernet technologies. With operators’ focus on increased network quality and efficiency, the ability to deal with high data volumes while maintaining telecom grade service levels is key. This also drives demand for services targeting the operational efficiency of operators, such as managed services and consulting.

There is continued good growth in the professional services market. Operators’ focus on efficiency drives interest in exploring business models such as managed operations, network sharing and network transformation. The move toward all-IP and increased network complexity will create further demand for systems integration and consulting.

Mobile subscriptions are estimated to have increased by 176 million in the quarter, reaching 5.1 billion. China and India alone accounted for almost 50% of net additions with 29 and 55 million respectively. Global mobile penetration is now 74%. GSM/GPRS/EDGE added 127 of the 176 million net subscription additions in the quarter and will continue to be an important technology for billions of users for many years to come.

The global number of new WCDMA subscriptions grew by 42 million in the quarter to a total of 576 million, of which 380 million are estimated to be HSPA. Ericsson estimates that the global mobile broadband subscriptions will amount to more than 3.4 b. by 2015.

Global fixed broadband subscriptions reached nearly 487 million during second quarter 2010. Growth slowed somewhat, adding 13 million new subscriptions. DSL remains the most widely deployed broadband technology, representing 66% of total subscribers. China is the largest single market with 24% of subscriptions, 115 million, while the Asia Pacific market as a whole represents 41% of the total broadband market. United States is the second largest country with 83 million subscriptions.

From originally having connected places and then people, operators are now moving towards connecting things. Ericsson believes that in the future, every device that can benefit from connectivity will be connected.


PARENT COMPANY INFORMATION Net sales for the nine-month period amounted to SEK 0.0 (0.3) b. and income after financial items was SEK 5.9 (5.8) b.

Major changes in the Parent Company’s financial position for the nine-month period include: investments in LG-Ericsson of SEK 1.9 b.; decreased current and non-current receivables from subsidiaries of SEK 10.5 b.; increased current other receivables of SEK 2.4 b. and decreased current and non-current liabilities to subsidiaries of SEK 4.9 b. As per September 30, 2010, cash, cash equivalents and short-term investments amounted to SEK 63.3 (62.4) b.

In accordance with the conditions of the long-term variable remuneration program (LTV) for Ericsson employees, 1,402,553 shares from treasury stock were sold or distributed to employees during the third quarter. The holding of treasury stock at September 30, 2010 was 74,982,882 Class B shares.

OTHER INFORMATION Acquisition of Nortel’s multi-service switch business On September 25, 2010, Ericsson announced it has entered into an asset purchase agreement to acquire Nortel’s multi-service switch business, MSS. The cash purchase price is USD 65 million on a cash and debt free basis, subject to adjustments. The transaction is subject to court and customary regular approvals.

Acquisition of InCode’s strategy and technology group assets On September 7, 2010, Ericsson announced it has acquired certain assets of inCode’s strategy and technology group. InCode provides strategic business and consulting services to clients in telecommunications. The acquisition brings approximately 45 consultants in the US and Canada.

Changes in Ericsson’s Executive Leadership Team On September 20, 2010, Ericsson announced that Torbjörn Possne, previously Senior Vice President and Head of Group Function Sales & Marketing, assumes the role as head of customer unit Vodafone, effective October 1, 2010. A successor to Torbjörn Possne in the Executive Leadership Team will be announced separately.

On September 23, 2010, Ericsson appointed Bina Chaurasia as Senior Vice President and Head of Human Resources and Organization, effective November 15, 2010.


Assessment of risk environment Ericsson’s operational and financial risk factors and uncertainties along with our strategies and tactics to mitigate risk exposures or limit unfavorable outcomes are described in our Annual Report 2009. Compared to the risks described in the Annual Report 2009, no material new or changed risk factors or uncertainties have been identified in the quarter.

Risk factors and uncertainties in focus during the forthcoming six-month period for the Parent Company and the Ericsson Group include:

Potential negative effects on operators’ willingness to invest in network development due to a continued uncertainty in the financial markets and a weak economic business environment as well as uncertainty regarding the financial stability of suppliers, for example due to lack for borrowing facilities, or reduced consumer telecom spending, or increased pressure on us to provide financing;

Effects on gross margins and/or working capital of the product mix in the Networks segment between sales of software, upgrades and extensions as well as break-in contracts;

Effects on gross margins of the product mix in the Global Services segment including proportion of new network build-outs and share of new managed services deals with initial transition costs;

A continued volatile sales pattern in the Multimedia segment or variability in our overall sales seasonality could make it more difficult to forecast future sales;

Effects of the ongoing industry consolidation among our customers as well as between our largest competitors, e.g. with postponed investments and intensified price competition as a consequence;

Changes in foreign exchange rates, in particular USD and EUR; Political unrest or instability in certain markets; Effects on production and sales from restrictions with respect to timely and adequate supply of

materials, components and production capacity and other vital services on competitive terms; Natural disasters, effecting production, supply and transportation. Ericsson conducts business in certain countries which are subject to trade restrictions or which are focused on by certain investors. We stringently follow all relevant regulations and trade embargos applicable to us in our dealings with customers operating in such countries. Moreover, Ericsson operates globally in accordance with Group level policies and directives for business ethics and conduct. In no way should our business activities in these countries be construed as supporting a particular political agenda or regime. We have activities in such countries mainly due to that certain customers with multi-country operations put demands on us to support them in all their markets.

Stockholm, October 22, 2010

Telefonaktiebolaget LM Ericsson (publ)

Hans Vestberg, President and CEO

Date for next report: January 25, 2011


AUDITORS’ REVIEW REPORT We have reviewed this report for the period January 1 to September 30, 2010, for Telefonaktiebolaget LM Ericsson (publ). The board of directors and the CEO are responsible for the preparation and presentation of this financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this financial information based on our review.

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by FAR SRS. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden, RS, and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group and with the Swedish Annual Accounts Act regarding the Parent Company.

Stockholm, October 22, 2010

PricewaterhouseCoopers AB

Peter Clemedtson

Authorized Public Accountant


EDITOR’S NOTE To read the complete report with tables, please go to: www.ericsson.com/investors/financial_reports/2010/9month10-en.pdf

Ericsson invites media, investors and analysts to a press conference at the Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), October 22. An analysts, investors and media conference call will begin at 14.00 (CET).

Live webcast of the press conference and conference call as well as supporting slides will be available at www.ericsson.com/press and www.ericsson.com/investors

Video material will be published during the day on www.ericsson.com/broadcast_room

FOR FURTHER INFORMATION, PLEASE CONTACT Henry Sténson, Senior Vice President, Communications Phone: +46 10 719 4044 E-mail: [email protected] or [email protected]

Investors Åse Lindskog, Vice President, Head of Industry and Investor Relations Phone: +46 10 719 9725, +46 730 244 872 E-mail: [email protected]

Susanne Andersson, Investor Relations Phone: +46 10 719 4631 E-mail: [email protected]

Andreas Hedemyr, Investor Relations Phone: +46 10 714 3748 E-mail: [email protected]

Media Ola Rembe, Vice President, Head of Corporate Public and Media Relations Phone: +46 10 719 9727, +46 730 244 873 E-mail: [email protected]

Corporate Public & Media Relations Phone: +46 10 719 69 92 E-mail: [email protected]

Telefonaktiebolaget LM Ericsson (publ) Org. number: 556016-0680 Torshamnsgatan 23 SE-164 83 Stockholm Phone: +46 10 719 0000 www.ericsson.com

http://www.ericsson.com/investors/financial_reports/2010/9month10-en.pdf

http://www.ericsson.com/press

http://www.ericsson.com/investors

http://www.ericsson.com/broadcast_room

mailto:[email protected]







http://www.ericsson.com/


Disclosure Pursuant to the Swedish Securities Markets Act Ericsson discloses the information provided herein pursuant to the Securities Markets Act. The information was submitted for publication at 07.30 CET, on October 22, 2010.

Safe Harbor Statement of Ericsson under the US Private Securities Litigation Reform Act of 1995;

All statements made or incorporated by reference in this release, other than statements or characterizations of historical facts, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “would”, “potential”, “continue”, and variations or negatives of these words, and include, among others, statements regarding: (i) strategies, outlook and growth prospects; (ii) positioning to deliver future plans and to realize potential for future growth; (iii) liquidity and capital resources and expenditure, and our credit ratings; (iv) growth in demand for our products and services; (v) our joint venture activities; (vi) economic outlook and industry trends; (vii) developments of our markets; (viii) the impact of regulatory initiatives; (ix) research and development expenditures; (x) the strength of our competitors; (xi) future cost savings; (xii) plans to launch new products and services; (xiii) assessments of risks; (xiv) integration of acquired businesses; (xv) compliance with rules and regulations and (xvi) infringements of intellectual property rights of others.

In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements speak only as of the date hereof and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for Ericsson include, but are not limited to: (i) material adverse changes in the markets in which we operate or in global economic conditions; (ii) increased product and price competition; (iii) reductions in capital expenditure by network operators; (iv) the cost of technological innovation and increased expenditure to improve quality of service; (v) significant changes in market share for our principal products and services; (vi) foreign exchange rate or interest rate fluctuations; and (vii) the successful implementation of our business and operational initiatives.


FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION Financial statements Page Consolidated income statement and statement of comprehensive income 15 Consolidated balance sheet 16 Consolidated statement of cash flows 17 Consolidated statement of changes in equity 18 Consolidated income statement - isolated quarters 19 Consolidated statement of cash flows - isolated quarters 20 Parent Company income statement 21 Parent Company balance sheet 21

Additional information Page Accounting policies 22 Accounting policies (cont.) 23 Net sales by segment by quarter 24 Operating income by segment by quarter 25 Operating margin by segment by quarter 25 EBITDA by segment by quarter 26 EBITDA margin by segment by quarter 26 Net sales by region by quarter 27 Net sales by region by quarter (cont.) 28 External net sales by region by segment 29 Top 5 countries in sales 29 Provisions 30 Number of employees 30 Information on investments in assets subject to depreciation, amortization and impairment 30 Other information 31 Ericsson planning assumptions for year 2010 31 Consolidated operating income, excluding restructuring charges 32 Restructuring charges by function 32 Restructuring charges by segment 32 Operating income by segment, excluding restructuring charges 33 Operating margin by segment, excluding restructuring charges 33 EBITDA by segment, excluding restructuring charges 33 EBITDA margin by segment, excluding restructuring charges 33

SEK million 2009 2010 Change 2009 2010 Change

Net sales 46,433 47,481 2% 148,144 140,565 -5%Cost of sales -30,455 -29,337 -4% -96,943 -88,099 -9%Gross income 15,978 18,144 14% 51,201 52,466 2%Gross margin (%) 34.4% 38.2% 34.6% 37.3%

Research and development expenses -8,218 -7,689 -6% -23,749 -22,966 -3%Selling and administrative expenses -5,279 -5,775 9% -19,585 -19,941 2%Operating expenses -13,497 -13,464 0% -43,334 -42,907 -1%

Other operating income and expenses 222 620 2,204 1,422Operating income before shares in earnings of JV and associated companies 2,703 5,300 10,071 10,981Operating margin before shares in earnings of JV and associated companies (%) 5.8% 11.2% 6.8% 7.8%

Shares in earnings of JV and associated companies -1,559 -90 -5,939 -770Operating income 1,144 5,210 4,132 10,211

Financial income 296 168 1,560 916Financial expenses -294 -302 -830 -1,336Income after financial items 1,146 5,076 4,862 9,791

Taxes -374 -1,523 -1,460 -2,937Net income 772 3,553 3,402 6,854

Net income attributable to: - Stockholders of the Parent Company 810 3,677 3,358 6,822 - Non-controlling interests -38 -124 44 32

Other informationAverage number of shares, basic (million) 3,190 3,198 3,188 3,197Earnings per share, basic (SEK)1) 0.25 1.15 1.05 2.13Earnings per share, diluted (SEK)1) 0.25 1.14 1.05 2.12

SEK million 2009 2010 2009 2010

Net income 772 3,553 3,402 6,854

Other comprehensive incomeActuarial gains and losses, and the effect of the asset ceiling, related to pensions -73 402 -355 -126participations

Fair value remeasurement - -1 -1 8

Cash flow hedges Gains/losses arising during the period 2,106 3,111 1,202 1,543Reclassification adjustments for gains/losses included in profit or loss -295 359 5,149 403Adjustments for amounts transferred to initial carrying amount of hegded items - - -1,261 -136

Changes in cumulative translation adjustments -5,522 -7,721 -3,655 -4,564Tax on items relating to components of OCI -539 -1,031 -1,565 -544Total other comprehensive income -4,323 -4,881 -486 -3,416Total comprehensive income -3,551 -1,328 2,916 3,438

Total comprehensive income attributable to:Stockholders of the Parent Company -3,417 -1,049 2,963 3,442Non-controlling interests -134 -279 -47 -4

Jul - Sep Jan - Sep

Consolidated Income Statement

Statement of Comprehensive IncomeJan - Sep

1) Based on Net income attributable to stockholders of the Parent Company

Jul - Sep

Ericsson Third Quarter Report 2010, October 22, 2010 15 (33)

Consolidated Balance SheetDec 31 Jun 30 Sep 30

SEK million 2009 2010 2010

ASSETSNon-current assets Intangible assets

Capitalized development expenses 2,079 2,706 2,868Goodwill 27,375 30,003 26,346Intellectual property rights, brands and other intangible assets 18,739 16,801 17,191

Property, plant and equipment 9,606 9,810 9,290

Financial assetsEquity in JV and associated companies 11,578 11,596 10,079Other investments in shares and participations 256 266 276Customer financing, non-current 830 969 1,246Other financial assets, non-current 2,577 2,692 2,466

Deferred tax assets 14,327 16,053 14,20887,367 90,896 83,970

Current assets Inventories 22,718 29,397 30,304

Trade receivables 66,410 69,385 57,831Customer financing, current 1,444 2,132 2,251Other current receivables 15,146 17,429 18,705

Short-term investments 53,926 51,980 54,977Cash and cash equivalents 22,798 15,610 21,197

182,442 185,933 185,265

Total assets 269,809 276,829 269,235

EQUITY AND LIABILITIESEquityStockholders' equity 139,870 138,309 137,395Minority interests in equity of subsidiaries 1,157 2,115 1,674

141,027 140,424 139,069

Non-current liabilities Post-employment benefits 8,533 8,498 8,075Provisions, non-current 461 513 408Deferred tax liabilities 2,270 2,431 2,432Borrowings, non-current 29,996 29,491 28,016Other non-current liabilities 2,035 2,296 3,178

43,295 43,229 42,109

Current liabilitiesProvisions, current 11,970 12,548 10,529Borrowings, current 2,124 3,797 4,353Trade payables 18,864 20,266 20,724Other current liabilities 52,529 56,565 52,451

85,487 93,176 88,057

Total equity and liabilities 269,809 276,829 269,235

Of which interest-bearing liabilities and post-employment benefits 40,653 41,786 40,444

Net cash 36,071 25,804 35,730

Assets pledged as collateral 550 579 598Contingent liabilities 1,245 872 920


SEK million 2009 2010 2009 2010 2009

Operating activitiesNet income 772 3,553 3,402 6,854 4,127Adjustments to reconcile net income to cash

Taxes -1,137 -226 -2,405 -952 -1,011Earnings/dividends in JV and associated companies 1,319 123 4,801 800 6,083Depreciation, amortization and impairment losses 3,268 2,270 8,232 7,707 12,124Other 978 -947 -288 -1,642 -340

Net income affecting cash 5,200 4,773 13,742 12,767 20,983

Changes in operating net assetsInventories 660 -3,763 -96 -8,690 5,207Customer financing, current and non-current 394 -437 126 -1,243 598Trade receivables 3,655 7,443 10,482 7,581 7,668Trade payables -2,096 1,292 -5,319 1,770 -3,522Provisions and post-employment benefits -1,060 -1,726 -2,793 -1,996 -2,950Other operating assets and liabilities, net -1,076 4,237 -4,192 1,217 -3,508

477 7,046 -1,792 -1,361 3,493

Cash flow from operating activities 5 677 11,819 11 950 11,406 24 476

Investing activitiesInvestments in property, plant and equipment - 690 -1,027 -2 897 -2,702 -4 006Sales of property, plant and equipment 99 17 238 109 534Acquisitions/divestments of subsidiaries and other operations, net - 750 -559 -9 260 -2,507 -18,082Product development - 245 -317 - 781 -1,319 -1,443Other investing activities 3 226 -817 2 695 -777 2,606Short-term investments -17 847 -3,368 -17 749 -1,263 -17,071Cash flow from investing activities -16,207 -6,071 -27,754 -8,459 -37,462

Cash flow before financing activities -10,530 5,748 -15,804 2,947 -12,986

Financing activitiesDividends paid -20 -238 -5,976 -6,639 -6,318Other financing activities 535 1,165 10,421 2,638 4,617Cash flow from financing activities 515 927 4,445 -4,001 -1,701

Effect of exchange rate changes on cash -1,263 -1,088 -769 -547 -328

Net change in cash -11,278 5,587 -12,128 -1,601 -15,015

Cash and cash equivalents, beginning of period 36,963 15,610 37,813 22,798 37,813

Cash and cash equivalents, end of period 25,685 21,197 25,685 21,197 22,798

Jan - Sep

Consolidated Statement of Cash FlowsJul - Sep Jan - Dec


Consolidated Statement of Changes in EquityJan - Sep Jan - Dec Jan - Sep

SEK million 2009 2009 2010

Opening balance 142,084 142,084 141,027Total comprehensive income 2,916 4,612 3,438Stock issue 135 135 -Sale / Repurchase of own shares -87 -60 36Stock purchase and stock option plans 441 658 436Dividends paid -5,976 -6,318 -6,639Business combinations -84 -84 771Closing balance 139,429 141,027 139,069


Isolated quarters, SEK million Q1 Q2 Q3 Q4 Q1 Q2 Q3

Net sales 49,569 52,142 46,433 58,333 45,112 47,972 47,481Cost of sales -31,957 -34,531 -30,455 -39,335 -28,527 -30,235 -29,337Gross income 17,612 17,611 15,978 18,998 16,585 17,737 18,144Gross margin (%) 35.5% 33.8% 34.4% 32.6% 36.8% 37.0% 38.2%

Research and development expenses -7,080 -8,451 -8,218 -9,306 -7,526 -7,751 -7,689Selling and administrative expenses -6,863 -7,443 -5,279 -7,323 -7,008 -7,158 -5,775Operating expenses -13,943 -15,894 -13,497 -16,629 -14,534 -14,909 -13,464

Other operating income and expenses 342 1,640 222 878 302 500 620Operating income before shares in earnings of JV and associated companies 4,011 3,357 2,703 3,247 2,353 3,328 5,300Operating margin before shares in earnings of JV and associated companies (%) 8.1% 6.4% 5.8% 5.6% 5.2% 6.9% 11.2%

Shares in earnings of JV and associated companies -2,236 -2,144 -1,559 -1,461 -372 -308 -90Operating income 1,775 1,213 1,144 1,786 1,981 3,020 5,210

Financial income 1,260 4 296 314 278 470 168Financial expenses -457 -79 -294 -719 -438 -596 -302Income after financial items 2,578 1,138 1,146 1,381 1,821 2,894 5,076

Taxes -745 -341 -374 -656 -547 -867 -1,523Net income 1,833 797 772 725 1,274 2,027 3,553

Net income attributable to: - Stockholders of the Parent Company 1,717 831 810 314 1,264 1,881 3,677 - Non-controlling interests 116 -34 -38 411 10 146 -124

Other informationAverage number of shares, basic (million) 3,187 3,188 3,190 3,194 3,195 3,196 3,198Earnings per share, basic (SEK)1) 0.54 0.26 0.25 0.10 0.40 0.59 1.15Earnings per share, diluted (SEK)1) 0.54 0.26 0.25 0.10 0.39 0.58 1.14

Consolidated Income Statement – Isolated Quarters2010

1) Based on Net income attributable to stockholders of the Parent Company.

2009



Operating activitiesNet income 1,833 797 772 725 1,274 2,027 3,553Adjustments to reconcile net income to cash

Taxes -628 -640 -1,137 1,394 -166 -560 -226Earnings/dividends in JV and associated companies 1,764 1,718 1,319 1,282 313 364 123Depreciation, amortization and impairment losses 1,852 3,112 3,268 3,892 3,133 2,304 2,270Other -623 -643 978 -52 -435 -260 -947

Net income affecting cash 4,198 4,344 5,200 7,241 4,119 3,875 4,773

Changes in operating net assetsInventories -2,362 1,606 660 5,303 -1,465 -3,462 -3,763Customer financing, current and non-current -1 -267 394 472 -598 -208 -437Trade receivables 1,810 5,017 3,655 -2,814 3,954 -3,816 7,443Trade payables -1,360 -1,863 -2,096 1,797 -955 1,433 1,292Provisions and post-employment benefits -3,265 1,532 -1,060 -157 -1,058 788 -1,726Other operating assets and liabilities, net -1,878 -1,238 -1,076 684 -1,703 -1,317 4,237

-7,056 4,787 477 5,285 -1,825 -6,582 7,046

Cash flow from operating activities -2,858 9,131 5,677 12,526 2,294 -2,707 11,819

Investing activitiesInvestments in property, plant and equipment -1,018 -1,189 -690 -1,109 -659 -1,016 -1,027Sales of property, plant and equipment 25 114 99 296 47 45 17Acquisitions/divestments of subsidiaries and other operations, net -9,491 981 -750 -8,822 -1,080 -868 -559Product development -209 -327 -245 -662 -278 -724 -317Other investing activities -1,417 886 3,226 -89 1,859 -1,819 -817Short-term investments -424 522 -17,847 678 -3,844 5,949 -3,368Cash flow from investing activities -12,534 987 -16,207 -9,708 -3,955 1,567 -6,071

Cash flow before financing activities -15,392 10,118 -10,530 2,818 -1,661 -1,140 5,748

Financing activitiesDividends paid - -5,956 -20 -342 - -6,401 -238Other financing activities 1,874 8,012 535 -5,804 -56 1,529 1,165Cash flow from financing activities 1,874 2,056 515 -6,146 -56 -4,872 927

Effect of exchange rate changes on cash 53 441 -1,263 441 -42 583 -1,088

Net change in cash -13,465 12,615 -11,278 -2,887 -1,759 -5,429 5,587

Cash and cash equivalents, beginning of period 37,813 24,348 36,963 25,685 22,798 21,039 15,610

Cash and cash equivalents, end of period 24,348 36,963 25,685 22,798 21,039 15,610 21,197

Consolidated Statement of Cash Flows – Isolated Quarters20102009


Parent Company Income Statement

SEK million 2009 2010 2009 2010

Net sales 27 8 291 26Cost of sales -10 -5 -1 -17Gross income 17 3 290 9

Operating expenses -753 -586 -2,336 -2,466Other operating income and expenses 738 1,054 2,211 2,347Operating income 2 471 165 -110

Financial net 620 661 5,676 6,031Income after financial items 622 1,132 5,841 5,921

Transfers to (-) / from untaxed reserves Taxes -91 -146 -463 -82Net income 531 986 5,378 5,839

SEK million 2009 2010 2009 2010

Net income 531 986 5,378 5,839

Cash flow hedges Gains/losses arising during the period -170 - 442 136Adjustments for amounts transferred to initial carrying amount of hegded items - - -1,385 -136

Tax on items reported directly in or transferred from equity - - 204 -Other comprehensive income -170 - -739 -Total comprehensive income 361 986 4,639 5,839

Parent Company Balance SheetDec 31 Sep 30

SEK million 2009 2010

ASSETSFixed assetsIntangible assets 2,219 1,103Tangible assets 527 547Financial assets 101,344 98,995

104,090 100,645

Current assets Inventories 61 45Receivables 23,704 20,235Short-term investments 53,926 54,977Cash and cash equivalents 8,477 8,361

86,168 83,618

Total assets 190,258 184,263

STOCKHOLDERS' EQUITY, PROVISIONS AND LIABILITIESEquityRestricted equity 47,859 47,859Non-restricted equity 41,953 41,443

89,812 89,302

Untaxed reserves 915 915

Provisions 1,069 1,033

Non-current liabilities 57,011 54,144

Current liabilities 41,451 38,869

Total stockholders' equity, provisions and liabilities 190,258 184,263

Assets pledged as collateral 550 598Contingent liabilities 13,072 15,467

Jul - Sep

Statement of Comprehensive IncomeJul - Sep

Jan - Sep

Jan - Sep


Accounting PoliciesAccounting Policies The Group This interim report is prepared in accordance with IAS 34. The term “IFRS” used in this document refers to the application of IAS and IFRS as well as interpretations of these standards as issued by IASB’s Standards Interpretation Committee (SIC) and IFRS Interpre-tations Committee. The accounting policies adopted are consistent with those of the annual report for the year ended December 31, 2009, and should be read in conjunction with that annual report.

As from January 1, 2010, the Company has applied the following new or amended IFRS: • IFRS 3 Business Combinations (revised)

The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, an expansion of the definition of a business and a business combination, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed as incurred.

• IAS 27 Consolidated and separate financial statements (revised)

The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains or losses. The standard also specifies the ac-counting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognized in income statement.

The following new or amended standards and interpretations have also been adopted: • IFRIC17, Distributions of Non-Cash Assets to Owners (Issued November 27, 2008) • IFRS 2, amendment, Group Cash-settled Share-based Payment Transactions (issued June 18, 2009) • Improvements to IFRSs (Issued April 16, 2009) None of the new or amended standards and interpretations has had any significant impact on the financial result or position of the Company. There is no difference between IFRS effective as per September 30, 2010 and IFRS as endorsed by the EU. However, the impact on business combination accounting due to the revised IFRS 3 Business Combinations is dependent on type and size of any future arrangement involving business combination.


Accounting Policies (cont.) Changes in external reporting Change in segments As of January 1, 2010, Ericsson reports the following segments: Networks, Global Services, Multimedia, Sony Ericsson and ST-Ericsson. The only change compared to previous years is that Network Rollout is now included in Global Services instead of Networks. All other segments are unchanged. With this change the external reporting is aligned with the new internal reporting structure. Segments as of January 1, 2010: Networks Global Services

Of which Professional Services

Of which Managed Services

Of which Network Rollout

Multimedia Sony Ericsson ST-Ericsson Change in geographical break down As of January 1, 2010, the geographical reporting structure is changed. Instead of five geographical areas, ten regions are reported, mirroring the new internal geographical organization. A part called “Other” is also be reported, consisting of business not reported in the geographical structure, e.g. embedded modules, cables, power modules as well as intellectual property rights and licenses. Regions as of January 1, 2010: North America Latin America North Europe and Central Asia Western and Central Europe Mediterranean Middle East Sub-Saharan Africa India China and Northeast Asia South East Asia and Oceania Other In 2008 and 2009 Ericsson reported top 15 countries. As of January 1, 2010, top five countries are reported. EBITA replaces EBITDA As of January 1, 2010, EBITA and EBITA margin for segments are reported. This is also reported for Network Rollout and Profes-sional Services in Global Services. For the Managed Services sales figures are reported. EBITA is defined as Earnings Before Interest, Tax, Amortizations and write-downs of acquired intangibles. EBITA margin is defined as Earnings Before Interest, Taxes, Amortizations and write-downs of acquired intangibles, as a percentage of Net Sales. Previous years, Ericsson has reported EBITDA. The shift to EBITA is done to better reflect the underlying business. Numbers have been restated for 2009 accordingly.



Networks1) 28,842 28,795 24,504 31,844 24,704 25,472 26,087Global Services1) 17,486 20,019 18,578 23,137 18,098 20,080 19,076

Of which Professional Services 12,799 14,077 12,780 16,466 13,251 14,838 13,736

Of which Managed Services 4,178 4,587 3,570 5,098 4,888 5,642 5,227

Of which Network Rollout 4,687 5,942 5,798 6,671 4,847 5,242 5,340

Multimedia 3,241 3,328 3,351 3,352 2,310 2,420 2,318Total 49,569 52,142 46,433 58,333 45,112 47,972 47,481

Sequential change, percent Q1 Q2 Q3 Q4 Q1 Q2 Q3Networks1) -25% 0% -15% 30% -22% 3% 2%Global Services1) -26% 14% -7% 25% -22% 11% -5%

Of which Professional Services -21% 10% -9% 29% -20% 12% -7%

Of which Managed Services -2% 10% -22% 43% -4% 15% -7%

Of which Network Rollout -38% 27% -2% 15% -27% 8% 2%

Multimedia -17% 3% 1% 0% -31% 5% -4%Total -26% 5% -11% 26% -23% 6% -1%

Year over year change, percent Q1 Q2 Q3 Q4 Q1 Q2 Q3Networks1) 13% 1% -13% -17% -14% -12% 6%Global Services1) 20% 27% 13% -3% 3% 0% 3%

Of which Professional Services 28% 28% 9% 2% 4% 5% 7%

Of which Managed Services 37% 37% -1% 19% 17% 23% 46%

Of which Network Rollout 4% 24% 24% -12% 3% -12% -8%

Multimedia 25% 23% -4% -14% -29% -27% -31%Total 12% 7% -6% -13% -9% -8% 2%

Year to date, SEK million Jan-Mar Jan-Jun Jan-Sep Jan-Dec Jan-Mar Jan-Jun Jan-SepNetworks1) 28,842 57,637 82,141 113,985 24,704 50,176 76,263Global Services1) 17,486 37,505 56,083 79,220 18,098 38,178 57,254


Of which Managed Services 4,178 8,765 12,335 17,433 4,888 10,530 15,757

Of which Network Rollout 4,687 10,629 16,427 23,098 4,847 10,089 15,429

Multimedia 3,241 6,569 9,920 13,272 2,310 4,730 7,048Total 49,569 101,711 148,144 206,477 45,112 93,084 140,565

Year to date,year over year change, percent Jan-Mar Jan-Jun Jan-Sep Jan-Dec Jan-Mar Jan-Jun Jan-SepNetworks1) 13% 7% 0% -5% -14% -13% -7%Global Services1) 20% 24% 20% 12% 3% 2% 2%


Of which Managed Services 37% 37% 24% 22% 17% 20% 28%

Of which Network Rollout 4% 14% 18% 7% 3% -5% -6%

Multimedia 25% 24% 13% 5% -29% -28% -29%Total 12% 10% 4% -1% -9% -8% -5%

Net Sales by Segment by QuarterSince the segments Sony Ericsson and ST-Ericsson are reported in accordance with the equity method, their sales are not included below. Net sales related to these segments are disclosed under SEGMENT RESULTS. Net sales related to other segments are set out below.

2009 2010

2010

2009 2010

1) For 2009 Networks and Global Services are restated in accordance with the change in segments.

2010

2009

2009

2009 2010


Isolated quarters, SEK million Q1 Q2 Q3 Q4 Q1 Q2 Q3Networks1) 3,067 1,265 1,138 2,128 1,540 2,507 3,717Global Services1) 1,520 2,249 1,426 1,076 1,325 1,377 1,891


Of which Network Rollout -229 -16 -202 -271 -94 46 -34

Multimedia 44 18 330 263 -335 -479 -187Unallocated 2) -77 -323 -168 -287 -158 -128 -109Subtotal Segments excluding Sony Ericsson and ST-Ericsson 4,554 3,209 2,726 3,180 2,372 3,277 5,312

Sony Ericsson -2,070 -1,543 -1,036 -1,044 76 134 290ST-Ericsson 3) -709 -453 -546 -351 -467 -391 -392Subtotal Sony Ericsson and ST-Ericsson -2,779 -1,996 -1,582 -1,395 -391 -257 -102

Total 1,775 1,213 1,144 1,785 1,981 3,020 5,210



Of which Network Rollout -229 -246 -448 -719 -94 -48 -82

Multimedia 44 62 392 655 -335 -814 -1,001Unallocated 2) -77 -400 -568 -855 -158 -286 -395Subtotal Segments excluding Sony Ericsson and ST-Ericsson 4,554 7,763 10,489 13,669 2,372 5,649 10,961

Sony Ericsson -2,070 -3,613 -4,649 -5,693 76 210 500ST-Ericsson 3) -709 -1,162 -1,708 -2,059 -467 -858 -1,250Subtotal Sony Ericsson and ST-Ericsson -2,779 -4,775 -6,357 -7,752 -391 -648 -750

Total 1,775 2,988 4,132 5,917 1,981 5,001 10,211

Q1 Q2 Q3 Q4 Q1 Q2 Q3Networks1) 11% 4% 5% 7% 6% 10% 14%Global Services1) 9% 11% 8% 5% 7% 7% 10%


Of which Network Rollout -5% 0% -3% -4% -2% 1% -1%

Multimedia 1% 1% 10% 8% -15% -20% -8%Subtotal excluding Sony Ericsson and ST-Ericsson 9% 6% 6% 5% 5% 7% 11%

Jan-Mar Jan-Jun Jan-Sep Jan-Dec Jan-Mar Jan-Jun Jan-SepNetworks1) 11% 8% 7% 7% 6% 8% 10%Global Services1) 9% 10% 9% 8% 7% 7% 8%


Of which Network Rollout -5% -2% -3% -3% -2% 0% -1%


As percentage of net sales, isolated quarters

2009

2009 2010As percentage of net sales, Year to date

3) First quarter 2009 includes a loss of SEK 0.5 b for January for Ericsson Mobile Platforms operations which as from February 1, 2009, are reported in ST-Ericsson. Second quarter 2009 includes a capital gain of SEK 0.1 b related to Ericsson Mobile Platforms. Fourth quarter 2009 includes a gain of SEK 0.1 b related to Ericsson Mobile Platforms.

Operating Income by Segment by Quarter2010

2009 2010

2009

1) For 2009 Networks and Global Services are restated in accordance with the change in segments.2) "Unallocated" consists mainly of costs for corporate staffs, non-operational capital gains and losses.

Operating Margin by Segment by Quarter2010




Of which Network Rollout -219 -5 -192 -244 6 74 -26

Multimedia 249 226 468 514 -123 -262 -7Unallocated 2) -73 -327 -162 -284 -158 -127 -108Subtotal Segments excluding Sony Ericsson and ST-Ericsson 5,386 5,304 5,041 5,757 4,541 4,489 6,613

Sony Ericsson -2,070 -1,543 -1,036 -1,044 76 134 290ST-Ericsson 3) -709 -453 -546 -351 -467 -391 -392Subtotal Sony Ericsson and STEricsson -2,779 -1,996 -1,582 -1,395 -391 -257 -102

Total 2,607 3,308 3,459 4,362 4,150 4,232 6,511



Of which Network Rollout -219 -225 -417 -661 6 80 54

Multimedia 249 475 943 1,457 -123 -385 -392Unallocated 2) -73 -400 -562 -846 -158 -285 -393Subtotal Segments excluding Sony Ericsson and ST-Ericsson 5,386 10,690 15,731 21,488 4,541 9,030 15,643

Sony Ericsson -2,070 -3,613 -4,649 -5,693 76 210 500ST-Ericsson 3) -709 -1,162 -1,708 -2,059 -467 -858 -1,250Subtotal Sony Ericsson and ST-Ericsson -2,779 -4,775 -6,357 -7,752 -391 -648 -750

Total 2,607 5,915 9,374 13,736 4,150 8,382 14,893



Of which Network Rollout -5% 0% -3% -4% 0% 1% -1%

Multimedia 8% 7% 14% 15% -5% -11% 0%Subtotal excluding Sony Ericsson and ST-Ericsson 11% 10% 11% 10% 10% 9% 14%

Jan-Mar Jan-Jun Jan-Sep Jan-Dec Jan-Mar Jan-Jun Jan-SepNetworks1) 13% 12% 12% 12% 12% 13% 15%Global Services1) 9% 11% 10% 9% 10% 9% 9%


Of which Network Rollout -5% -2% -3% -3% 0% 1% 0%


EBITA by Segment by Quarter20102009



2010As percentage of net sales, isolated quarters

2009

2009 2010

2) "Unallocated" consists mainly of costs for corporate staffs, non-operational capital gains and losses.

As percentage of net sales, Year to date

2009 2010

EBITA Margin by Segment by Quarter


Isolated quarters, SEK million Q1 Q2 Q3 Q4 Q1 Q2 Q3North America 4,762 5,734 3,980 9,436 9,498 13,050 12,861Latin America 4,376 4,797 4,993 5,859 3,964 4,200 3,667Northern Europe & Central Asia1) 2) 2,889 2,884 2,709 3,499 2,300 2,679 2,363Western & Central Europe2) 5,387 5,437 5,494 6,141 5,235 4,414 4,302Mediterranean2) 6,131 6,797 5,181 7,052 5,060 5,630 5,020Middle East 3,956 4,750 4,503 5,041 3,948 3,796 2,721Sub Saharan Africa 4,677 3,643 3,190 3,831 2,418 2,951 1,795India 4,025 3,653 4,156 3,428 2,303 1,351 2,129China & North East Asia 5,790 7,171 5,600 7,399 4,950 4,607 6,940South East Asia & Oceania 5,209 5,679 4,790 5,171 3,517 3,643 3,822Other1) 2) 2,367 1,597 1,837 1,476 1,919 1,651 1,861Total 49,569 52,142 46,433 58,333 45,112 47,972 47,4811) Of which Sweden 1,197 1,091 1,076 732 1,047 996 1,0232) Of which EU 12,604 12,595 11,033 13,081 11,065 10,384 9,664

Sequential change, percent Q1 Q2 Q3 Q4 Q1 Q2 Q3North America 3% 20% -31% 137% 1% 37% -1%Latin America -44% 10% 4% 17% -32% 6% -13%Northern Europe & Central Asia1) 2) -44% 0% -6% 29% -34% 16% -12%Western & Central Europe2) -21% 1% 1% 12% -15% -16% -3%Mediterranean 2) -37% 11% -24% 36% -28% 11% -11%Middle East -26% 20% -5% 12% -22% -4% -28%Sub Saharan Africa -4% -22% -12% 20% -37% 22% -39%India -13% -9% 14% -18% -33% -41% 58%China & North East Asia -32% 24% -22% 32% -33% -7% 51%South East Asia & Oceania -20% 9% -16% 8% -32% 4% 5%Other1) 2) -17% -33% 15% -20% 30% -14% 13%Total -26% 5% -11% 26% -23% 6% -1%1) Of which Sweden -50% -9% -1% -32% 43% -5% 3%2) Of which EU -31% 0% -12% 19% -15% -6% -7%

Year-over-year change, percent Q1 Q2 Q3 Q4 Q1 Q2 Q3North America 63% 46% -2% 104% 99% 128% 223%Latin America 7% -2% -18% -25% -9% -12% -27%Northern Europe & Central Asia1) 2) -5% -9% -23% -32% -20% -7% -13%Western & Central Europe2) 11% 14% 9% -10% -3% -19% -22%Mediterranean2) -4% 3% -23% -28% -17% -17% -3%Middle East -5% 12% 10% -6% 0% -20% -40%Sub Saharan Africa 47% 5% -17% -21% -48% -19% -44%India 42% -5% 7% -26% -43% -63% -49%China & North East Asia 27% 38% 50% -14% -15% -36% 24%South East Asia & Oceania 29% 15% -13% -20% -32% -36% -20%Other1) 2) -42% -53% -33% -48% -19% 3% 1%Total 12% 7% -6% -13% -9% -8% 2%1) Of which Sweden -40% -53% -51% -69% -13% -9% -5%2) Of which EU -1% -6% -16% -29% -12% -18% -12%

2010

Net Sales by Region by Quarter2009 2010

2009 2010

2009


Year to date, SEK million Jan-Mar Jan-Jun Jan-Sep Jan-Dec Jan-Mar Jan-Jun Jan-SepNorth America 4,762 10,496 14,476 23,912 9,498 22,548 35,409Latin America 4,376 9,173 14,166 20,025 3,964 8,164 11,831Northern Europe & Central Asia1) 2) 2,889 5,773 8,482 11,981 2,300 4,979 7,342Western & Central Europe2) 5,387 10,824 16,318 22,459 5,235 9,649 13,951Mediterranean2) 6,131 12,928 18,109 25,161 5,060 10,690 15,710Middle East 3,956 8,706 13,209 18,250 3,948 7,744 10,465Sub Saharan Africa 4,677 8,320 11,510 15,341 2,418 5,369 7,164India 4,025 7,678 11,834 15,262 2,303 3,654 5,783China & North East Asia 5,790 12,961 18,561 25,960 4,950 9,557 16,497South East Asia & Oceania 5,209 10,888 15,678 20,849 3,517 7,160 10,982Other1) 2) 2,367 3,964 5,801 7,277 1,919 3,570 5,431Total 49,569 101,711 148,144 206,477 45,112 93,084 140,5651) Of which Sweden 1,197 2,288 3,364 4,096 1,047 2,043 3,0662) Of which EU 12,604 25,199 36,232 49,313 11,065 21,449 31,113

Year to date, year-over-year change, percent Jan-Mar Jan-Jun Jan-Sep Jan-Dec Jan-Mar Jan-Jun Jan-SepNorth America 63% 53% 33% 54% 99% 115% 145%Latin America 7% 2% -6% -13% -9% -11% -16%Northern Europe & Central Asia1) 2) -5% -7% -13% -19% -20% -14% -13%Western & Central Europe2) 11% 13% 11% 4% -3% -11% -15%Mediterranean2) -4% -1% -8% -15% -17% -17% -13%Middle East -5% 4% 6% 2% 0% -11% -21%Sub Saharan Africa 47% 25% 10% 0% -48% -35% -38%India 42% 15% 12% 0% -43% -52% -51%China & North East Asia 27% 33% 37% 18% -15% -26% -11%South East Asia & Oceania 29% 21% 8% -1% -32% -34% -30%Other1) 2) -42% -47% -44% -45% -19% -10% -6%Total 12% 10% 4% -1% -9% -8% -5%1) Of which Sweden -40% -47% -48% -54% -13% -11% -9%2) Of which EU -1% -4% -8% -14% -12% -15% -14%

Net Sales by Region by Quarter (cont.)

2009 2010

2009 2010


Isolated quarter, SEK million GlobalQ3 2010 Networks Services Multimedia TotalNorth America 7,876 4,652 333 12,861Latin America 1,676 1,764 227 3,667Northern Europe & Central Asia 1,383 858 122 2,363Western & Central Europe 1,678 2,398 226 4,302Mediterranean 2,319 2,388 313 5,020Middle East 1,296 1,186 239 2,721Sub Saharan Africa 640 971 184 1,795India 1,231 733 165 2,129China & North East Asia 4,398 2,438 104 6,940South East Asia & Oceania 2,137 1,525 160 3,822Other 1,453 163 245 1,861Total 26,087 19,076 2,318 47,481Share of Total 55% 40% 5% 100%

Year to date, SEK million GlobalJan - Sep 2010 Networks Services Multimedia TotalNorth America 22,040 12,496 873 35,409Latin America 6,163 5,064 604 11,831Northern Europe & Central Asia 3,990 2,906 446 7,342Western & Central Europe 5,497 7,738 716 13,951Mediterranean 7,231 7,538 941 15,710Middle East 4,997 4,650 818 10,465Sub Saharan Africa 2,761 3,638 765 7,164India 3,284 2,067 432 5,783China & North East Asia 10,364 5,784 349 16,497South East Asia & Oceania 5,511 5,063 408 10,982Other 4,425 310 696 5,431Total 76,263 57,254 7,048 140,565Share of Total 54% 41% 5% 100%

Q3 Q3 Jan - Sep Jan - SepCountry 2009 2010 2009 2010United States 7% 26% 9% 24%China 7% 7% 9% 6%Japan 4% 7% 4% 5%Italy 4% 4% 4% 4%India 9% 4% 8% 4%

External Net Sales by Region by SegmentSince the segments Sony Ericsson and ST-Ericsson are reported in accordance with the equity method, their sales are not included below. Net sales related to these segments are disclosed under SEGMENT RESULTS. Net sales related to other segments are set out below.

Top 5 Countries in Sales


Isolated quarters, SEK million Q1 Q2 Q3 Q4 Q1 Q2 Q3Opening balance 14,350 12,592 13,957 12,386 12,431 12,064 13,061Additions 1,672 3,710 2,169 3,591 1,777 2,416 803Utilization/Cash out -3,052 -1,982 -3,083 -2,612 -1,565 -1,498 -1,722

Of which restructuring -1,179 -753 -1,241 -1,075 -677 -701 -911

Reversal of excess amounts -287 -146 -121 -1,193 -498 -346 -417Reclassification, translation difference and other -91 -217 -536 259 -81 425 -788Closing balance 12,592 13,957 12,386 12,431 12,064 13,061 10,937

Year to date, SEK million Jan-Mar Jan-Jun Jan-Sep Jan-Dec Jan-Mar Jan-Jun Jan-SepOpening balance 14,350 14,350 14,350 14,350 12,431 12,431 12,431Additions 1,672 5,382 7,551 11,142 1,777 4,193 4,996Utilization/Cash out -3,052 -5,034 -8,117 -10,729 -1,565 -3,063 -4,785

Of which restructuring -1,179 -1,932 -3,173 -4,248 -677 -1,378 -2,289

Reversal of excess amounts -287 -433 -554 -1,747 -498 -844 -1,261Reclassification, translation difference and other -91 -308 -844 -585 -81 344 -444Closing balance 12,592 13,957 12,386 12,431 12,064 13,061 10,937

End of period Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30North America 5,447 5,284 11,199 11,222 13,450 13,857 13,430Latin America 8,031 7,858 5,721 6,055 6,134 6,150 6,353Northern Europe & Central Asia1) 21,410 21,200 22,103 21,993 21,813 21,806 21,550Western & Central Europe 11,615 11,822 11,701 11,622 11,418 11,174 10,690Mediterranean 10,013 10,061 10,019 9,509 10,884 10,857 10,815Middle East 3,945 3,867 3,778 3,744 3,598 3,568 3,553Sub Saharan Africa 1,832 1,853 2,202 2,104 2,044 1,944 1,662India 3,375 3,614 3,798 4,184 4,726 5,408 6,086China & North East Asia 6,029 6,409 6,773 6,894 7,400 7,668 9,223South East Asia & Oceania 5,223 5,280 5,232 5,166 5,070 4,981 4,698Total 76,920 77,248 82,526 82,493 86,537 87,413 88,0601) Of which Sweden 18,812 18,605 18,311 18,217 18,082 18,070 17,942

Isolated quarters, SEK million Q1 Q2 Q3 Q4 Q1 Q2 Q3Additions

Property, plant and equipment 1,018 1,189 690 1,110 659 1,016 1,027Capitalized development expenses 209 327 245 662 278 724 317IPR, brands and other intangible assets 7 50 438 5,941 622 521 2,490

Total 1,234 1,566 1,373 7,713 1,559 2,261 3,834Depreciation, amortization and impairment losses

Property, plant and equipment 817 844 776 1,065 796 901 798Capitalized development expenses 202 173 177 251 168 192 171IPR, brands and other intangible assets1) 833 2,095 2,315 2,575 2,169 1,211 1,301

Total 1,852 3,112 3,268 3,891 3,133 2,304 2,2701) Of which restructuring costs - 1,275 1,509 1,471 945 - 14

Provisions20102009

2009 2010

Number of Employees

2009 2010

Information on investments in assets subject to depreciation, amortization, impairment and write-downs

2009 2010


Other Information

2009 2010 2009 2010 2009Number of shares and earnings per shareNumber of shares, end of period (million) 3,273 3,273 3,273 3,273 3,273

of which class A-shares (million) 262 262 262 262 262of which class B-shares (million) 3,011 3,011 3,011 3,011 3,011

Number of treasury shares, end of period (million) 82 75 82 75 79Number of shares outstanding, basic, end of period (million) 3,191 3,198 3,191 3,198 3,194Numbers of shares outstanding, diluted, end of period (million) 3,213 3,224 3,213 3,224 3,216Average number of treasury shares (million) 83 75 73 77 75Average number of shares outstanding, basic (million) 3,190 3,198 3,188 3,197 3,190Average number of shares outstanding, diluted (million)1) 3,212 3,224 3,210 3,222 3,212Earnings per share, basic (SEK) 0.25 1.15 1.05 2.13 1.15Earnings per share, diluted (SEK)1) 0.25 1.14 1.05 2.12 1.14

RatiosDays sales outstanding - - 118 109 106Inventory turnover days 84 93 77 82 68Payable days 55 64 57 62 57Equity ratio (%) - - 52.0% 51.7% 52.3%Return on equity (%) 2.3% 10.7% 3.2% 6.6% 2.6%Return on capital employed (%) 3.1% 11.9% 4.1% 8.2% 4.3%Capital turnover (times) 1.0 1.1 1.1 1.0 1.1Payment readiness, end of period - - 90,572 85,224 88,960Payment readiness, as percentage of sales - - 45.9% 45.5% 43.1%

Exchange rates used in the consolidationSEK/EUR - average rate - - 10.70 9.68 10.63

- closing rate - - 10.21 9.15 10.30SEK/USD - average rate - - 7.81 7.31 7.63

- closing rate - - 6.97 6.70 7.18

OtherExport sales from Sweden 21,607 23,829 69,621 68,015 94,829

Research and development expenses

Capital expenditures

Utilization of provisionsThe expected utilization of provisions for year 2010 is stated in the Annual Report 2009.

Ericsson Planning Assumptions for Year 2010

We estimate R&D expenses for the full year 2010 to be at around SEK 28-30 b. The estimate includes amortizations/write-downs of intangible assets related to major acquisitions previously made and excludes restructuring charges. However, currency effects may cause this to change.

Excluding acquisitions, the capital expenditures in relation to sales are not expected to be significantly different in 2010, remaining at roughly two percent of sales.

Jan - DecJan - SepJul - Sep

1) Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.



Net sales 49,569 52,142 46,433 58,333 45,112 47,972 47,481Cost of sales -31,585 -33,215 -29,623 -37,675 -27,727 -29,258 -28,960Gross income 17,984 18,927 16,810 20,658 17,385 18,714 18,521Gross margin (%) 36.3% 36.3% 36.2% 35.4% 38.5% 39.0% 39.0%

Research and development expenses -6,802 -6,761 -6,418 -7,029 -7,265 -7,133 -7,221Selling and administrative expenses -6,809 -6,886 -5,164 -7,014 -5,881 -6,752 -5,731Operating expenses -13,611 -13,647 -11,582 -14,043 -13,146 -13,885 -12,952

Other operating income and expenses 342 1,640 222 878 302 500 620Operating income before share in earnings of JV and associated companies 4,715 6,920 5,450 7,493 4,541 5,329 6,189Operating margin before share in earnings of JV and associated companies (%) 9.5% 13.3% 11.7% 12.8% 10.1% 11.1% 13.0%

Share in earnings of JV and associated companies -2,170 -1,997 -1,480 -431 -260 -142 3Operating income 2,545 4,923 3,970 7,062 4,281 5,187 6,192

Earnings per share, basic (SEK) excl. JV's and ass. comp 1.19 1.53 1.21 1.37 0.96 1.10 1.37Earnings per share, diluted (SEK)1) excl. JV's and ass. comp 1.19 1.52 1.20 1.36 0.96 1.09 1.36

Isolated quarters, SEK million Q1 Q2 Q3 Q4 Q1 Q2 Q3Cost of sales -371 -1,317 -832 -1,660 -800 -977 -377Research and development expenses -278 -1,690 -1,800 -2,277 -261 -619 -468Selling and administrative expenses -53 -558 -115 -308 -1,127 -404 -44Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson -702 -3,565 -2,747 -4,245 -2,188 -2,000 -889

Share in Sony Ericsson charges -66 -5 -9 -797 -15 -147 -27Share in ST-Ericsson charges -2 -140 -70 -233 -97 -19 -66Subtotal Sony Ericsson and ST-Ericsson -68 -145 -79 -1,030 -112 -166 -93

Total -770 -3,710 -2,826 -5,275 -2,300 -2,166 -982

Isolated quarters, SEK million Q1 Q2 Q3 Q4 Q1 Q2 Q3Networks -502 -2,283 -2,407 -3,166 -1,450 -885 -593Global Services -190 -982 -311 -951 -680 -954 -295

Of which Professional Services -175 -767 -252 -850 -588 -830 -246

Of which Network Rollout -15 -215 -59 -101 -92 -124 -49

Multimedia -10 -277 -28 -70 -45 -153 -1Unallocated - -23 -1 -58 -13 -8 -Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson -702 -3,565 -2,747 -4,245 -2,188 -2,000 -889

Sony Ericsson -66 -5 -9 -797 -15 -147 -27ST-Ericsson -2 -140 -70 -233 -97 -19 -66Subtotal Sony Ericsson and ST-Ericsson -68 -145 -79 -1030 -112 -166 -93

Total -770 -3,710 -2,826 -5,275 -2,300 -2,166 -982

Consolidated Operating Income excl. Restructuring Charges

2009 2010

2009 2010

Restructuring Charges by Segment

2009 2010

1) Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.

Restructuring Charges by Function




Of which Network Rollout -214 199 -143 -170 -2 170 15

Multimedia 54 295 358 333 -290 -326 -186Unallocated 2) -77 -300 -167 -229 -145 -119 -109Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson 5,256 6,774 5,473 7,425 4,560 5,278 6,201

Sony Ericsson -2,004 -1,538 -1,027 -247 91 281 317ST-Ericsson 3) -707 -313 -476 -118 -370 -372 -326Subtotal Sony Ericsson and ST-Ericsson -2,711 -1,851 -1,503 -365 -279 -91 -9

Total 2,545 4,923 3,970 7,060 4,281 5,187 6,192



Of which Network Rollout -5% 3% -2% -3% 0% 3% 0%




Of which Network Rollout -204 210 -133 -143 26 201 23

Multimedia 259 503 496 584 -116 -109 -6Unallocated 2) -73 -304 -161 -226 -145 -119 -108Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson 6,088 7,594 6,279 8,531 5,784 6,489 7,502

Sony Ericsson -2,004 -1,538 -1,027 -247 91 281 317ST-Ericsson 3) -707 -313 -476 -118 -370 -372 -326Subtotal Sony Ericsson and ST-Ericsson -2,711 -1,851 -1,503 -365 -279 -91 -9

Total 3,377 5,743 4,776 8,166 5,505 6,398 7,493



Of which Network Rollout -4% 4% -2% -2% 1% 4% 0%

Multimedia 8% 15% 15% 17% -5% -5% 0%Subtotal excluding Sony Ericsson and ST-Ericsson 12% 15% 14% 15% 13% 14% 16%

Operating Income by Segment excl. Restructuring Charges



2009 2010

2) "Unallocated" consists mainly of costs for corporate staffs, non-operational capital gains and losses.

Operating Margin by Segment excl. Restructuring ChargesAs percentage of net sales, isolated quarters

2009 2010

As percentage of net sales, isolated quarters

EBITA by Segment excl. Restructuring Charges

EBITA Margin by Segment excl. Restructuring Charges2010

2009 2010

2009


Présentation des résultats financiers Ericsson (Q3 2010)

Economy & Finance